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Dubya's Amusing Gas Price Fix

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June 18, 2008 – Comments (10)

Bush to Congress: Embrace Energy Exploration Now- AP

President Bush is calling on Congress to lift the ban on offshore oil and gas drilling that has been in place for 1981, saying it could eventually yield 18 billion barrels of oil.

Nevermind that this would bring us oil some decade or so down the road, and be such a tiny drop in the bucket that it has no prayer of moving prices. Nevermind that, had Bush had any foresight, commitment, or guts, he could have espoused conservation and dramatically reduced demand (and also price) for oil. Nevermind that the housing 0rgy pushed suburbs so far out an away from anything useful that people can't afford to commute to them, and that all could have been changed with smarter planning.

Nope, the solution to excess with Dubya is, as usual, more excess.

Oil is high enough to finally spur some change. I suggest all those pathetic and broke Hummer pilots park the carcasses on blocks on the White House lawn before heading to the Honda dealership for a Fit.

As with the housing Ponzi scheme and so much else in our country, it's only an emergency after everyone ignores the obvious for years... Anyone think we ought to stop rushing from fire to fire, and maybe stop piling up the kindling for years and tossing around matches?

10 Comments – Post Your Own

#1) On June 18, 2008 at 12:12 PM, LordZ wrote:

Had congress listened and followed Ronald Reagan when he asked for this ban to be lifted, America not the middle east could be reaping its own seed. But no, the sooner you get started the sooner we might actually have an energy policy, 18 billion or so barrels is hardly a drop in the bucket ~ current market value 2,376 billion dollars at current oil price levels, not to mention that our oil here is substantially a better grade than the stuff coming out of the middle east.

I guess 2,376 billion dollar is just a drop in the bucket to most spend happy democrats. And that idiot Obama calls this an empty gesture ~ someone needs to repeat him with that ugly stick but i'm glad because he'll probably lose many blue collar middle americans who will continue to suffer from their desire to do nothing but watch oil prices increase.

 

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#2) On June 18, 2008 at 12:20 PM, LordZ wrote:

Also you should consider all the high paying jobs that could be created here in America from such drilling, but what do these politicians care ? they can't see the big picture other than what their supporters yell at them and tell them what to do.

One crisis at a time bent... plenty of affordable housing now, Bent too bad no loaners are willing to loan any money

LMAO

 

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#3) On June 18, 2008 at 1:08 PM, DemonDoug (91.51) wrote:

Maybe you should consider all the high-paying jobs alternative energy would bring to this country.  One needs only to look at companies involved in building windmills and solar panels to see there are definite profits to be made.  18 billion really is a drop in the bucket, as he says "eventually" meaning what over 50 years?  It's like the solution to the credit crisis they put out.  The solution to the credit crisis is... more credit!  The solution to the oil crisis is... more oil!

Makes a lot of sense when there are many viable alternatives doesn't it?

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#4) On June 18, 2008 at 1:20 PM, TMFBent (99.83) wrote:

Cutting consumption here by 10-20% through improved efficiency and better planning (both of which can be accomplished relatively cheaply and with today's technology) would have a much more immediate and lasting efffect than pumping more barrels -- or promising to do so decades from now.

Besides, that oil makes much more sense as petrochemical feedstock (for which we have few replacements) than as fuel for locomotion, which can be achieved through a variety of means. Heck, Americans could commute on spaghetti if they weren't so lazy and didn't demand that McMansion 40 miles from work. I'm a prime example of someone who doesn't suffer much (directly) from gas price increases because I made a choice not to be dependent on driving.

You want energy independence, America? Ride a bike. Walk once in a while. Your healthcare costs would drop too.

 

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#5) On June 18, 2008 at 1:24 PM, AnomaLee (28.75) wrote:

It's pathetic that over 90% of the patents for solar technology are from the United States yet 90% of solar products are produced outside the United States.

Drilling for more oil is a short-term solution. I don't know why I'm surprised to read another baseless post by Lordz.

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#6) On June 18, 2008 at 1:54 PM, WillSurfForFood (84.10) wrote:

I'm not diagreeing with you Bent, I don't think opening up those areas to drilling is a long term solution. I've been very critical of Bush since the beginning but I think our Congress deserves a lot of blame for our energy policy. How about this recent news about  the Senate blocking debate on clean energy tax credits:

http://www.reuters.com/article/politicsNews/idUSN1730263720080617

Anywas all this talk of opening up areas for more offshore drilling makes me think the drillers are looking cheaper. Got RIG?

 

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#7) On June 18, 2008 at 2:49 PM, TMFBent (99.83) wrote:

I had RIG. Sold it too soon.

Regarding Bush's ridiculous energy solution (More!), his own pet department of energy estimates ANWAR drilling would at best reduce oil prices by 75 cents a barrel, about 10-15 years from now. Discount that to current value, and you'll see it's a worthless initiative next to what conservation and better fuel efficiency could do sooner rather than later.

Real Time Economics June 18, 12:56 PM
Don't Expect Too Much From ANWR

Last month the Department of Energy produced a report titled, “Analysis of Crude Oil Production in the Arctic National Wildlife Refuge.” (Hat tip, Menzie Chinn) The report makes two points that indicate that drilling in ANWR won’t do much to decrease energy prices any time soon. First, the report states that drilling wouldn’t add to domestic production for at least 10 years, and peak production can’t be expected until the 2020s. Meanwhile, under the middle-of-the-road estimate for output oil prices would be expected to decline by only 75 cents per barrel in 2025. If there’s less oil than expected in ANWR the reduction in prices would be 41 cents per barrel in 2026, and if there’s more than expected the drop in prices is seen around $1.44 per barrel in 2027.

At current prices even the high-end estimate would trim just about 1% from the cost of a barrel of oil, and even that reduction can’t be expected for almost 20 years.

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#8) On June 18, 2008 at 4:35 PM, LordZ wrote:

Anomalee, drilling is hardly a short term solution given the time span it takes to reap the rewards, oh sure everyone can have pie in the sky ideas.

However oil will still be king, if we had drilled back in the 80's

I sincerely doubt we would be in the same position we are in now.

Right now the slightest hint of a supply downturn or break down or minor skirmish or war ~ results in a severe spike in crude oil prices.

This is nothing new, we have been dealing with this almost since the start of the first desert war.

Its only going to get worse, especially when the worlds demand catches up to the reality that the supply eventually will shrink.

We can wait and keep watching our country bleed to death, or we can start and take meaningful actions to help stop the bleeding.

Right now it seems that everyone and his brother is drilling for oil, except for us.

Wake up.

 

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#9) On June 18, 2008 at 4:53 PM, TMFBent (99.83) wrote:

"Right now it seems that everyone and his brother is drilling for oil, except for us."

Couldn't be because we realize it's not really worth it, could it? 

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#10) On June 19, 2008 at 7:38 AM, saunafool (98.95) wrote:

There are two problems with Bush's proposal. First, it is exactly what he has been saying for 7 years, as though there is no alternative (except for cellulosic ethanol or hydrogen both of which will never be commercially viable).

Second, it does not recognize (as Bent does) that demand is where the U.S. holds the chips. We consume more oil than anyone else on the planet. We consume 3X as much oil as China and 10X as much per capita, we also consume almost 3X as much per capita as the Europeans.

If the world's largest consumer begins cutting consumption by a lot and makes serious investment in alternatives, OPEC will wake up and try to bring the price down (to keep the competition of alternative energy off the market).

We currently consume over 20 million bpd and produce less than 10 million bpd. Whatever drilling we do is likely to just compensate for the depletion of our existing fields. There will still be 10 million bpd of imports, mostly from people who don't like us.

So, the plan is flawed not because drilling in these areas in inherently bad; it is flawed because we have way more leverage in reducing our demand, as always, Bush completely ignores that side of the equation--the one we can change rather dramatically.

Finally, the U.S. is already drilling like crazy. Take a look at the rates for rigs in the Gulf of Mexico. Take a look at the profits of seismic data companies. The MMS has been auctioning blocs of the GOM constantly for the past several years. We're already drilling aplenty in the areas where we think the potential is very large. The MMS believes the deepwater GOM could hold something like 80 billion barrels. Yet, our production continues to decline, and the only people increasing production are Brazil and Canada.

Also, keep in mind that the government is lousy at predicting both reserves and oil prices. These are the same bozos who predicted 20-year oil prices of $28 a barrel as recently as 2005. They are already wrong by 5-fold. 

Furthermore, lifting the ban is always presented as though we know there are huge untapped oil fields in Alaska, offshore, in the Rockies, and if those damned environmentalists would just lift the bans on drilling, we'd have tons of oil. Sure, there is some oil, but there isn't an untapped Saudi Arabia out there.

The whole argument misses the point that the U.S. has drilled more wells than any other country on the planet, by far. We've also produced more oil cumulatively than anyone else. Our production has been in decline since 1971, and even Prudhoe Bay and the North Slope--the biggest fields we ever found--only put a temporary halt to our declining production.

So, while it is a soundbite, "we can't drill our way out of the problem" is essentially correct.

However, we can conserve and innovate our way out of it, and Bush fails to grasp this even after 7 years of constantly rising oil prices.

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